Wednesday, June 15, 2011
By Pranjal Gera
Increasing petrol prices compel companies to offer lower interest rates for petrol cars
The market has recently seen an upturn in the sales of diesel cars due to high petrol rates.
Thus the car companies are lowering their interest rates to almost 2% for petrol cars, while the interest rate for auto loans is around 12.5 %.
Volkswagen Financial Services, the Volkswagen's car financing arm has lowered the interest rates to 6.99% for its mid-size car.
Neeraj Garg, director at Volkswagen Sales India commented that this step has boosted their sales across the country and has also increased the demands of Volkswagen Vento, a petrol car.
Jnaneshwar Sen, senior VP in marketing at Honda Siel Cars said that currently the company is not having any diesel car in its catalogue which is proving to be a major setback on sales, thus the dealers are offering many special incentives and lower interest rates to attract buyers.
Ford Figo and Mercedes Cgi are among the other petrol cars that have been offered with lower interest rates to increase their sales.
According to some industry experts, these lower interest rates are not provided by the financiers, rather the car dealers are passing on a part of their commissions to help the financiers.
The market has seen a lower sales rate of 7% in the petrol cars last month, and by observing the present trends, a double digit growth rate can not be expected this year.
Many of the companies like Maruti Suzuki, Hyundai , Tata motors and even Mercedes have lowered their interest rates and are also working on promotional activities to boost up the slowing sales.
